Best-Performing Fund Manager Sees U.S. Pipeline Growth

Kevin McCarthy, the world’s best-performing energy fund manager in the past year, stared at the tangle of tax-exempt partnerships and corporate parents that drive the U.S. oil and gas pipeline business and kept his cool.

That was in 2010, when the Kayne Anderson Capital Partners LP manager in Houston said he found a way to profit from the mess: He realized the most undervalued of the bunch were the companies managing the partnerships, the so-called general partners, especially since they were positioned to earn escalating shares of cash flow as pipeline assets expanded.